Who’s Paying for it?

Who is going to pay the bills when they come due for insurance. People that buy coverage through the and receive a subsidy will be allowed a 90 day grace period to pay premiums. Typically, the insurance carrier will allow a 15 day grace period for unpaid insurance premiums.

This new policy of 90 day grace periods will begin January 1 2014 with the Affordable Care Act. When patients visit Dr’s offices they will be asked for their insurance cards and the Dr’s office will confirm eligibility with the various systems in place. Since there is a 90 day grace period to pay insurance premiums, members in the plan will show active or eligible.

What happens if they do not pay their premiums? Who is paying for it?

Well under the Affordable Care Act, the insurance carrier will pick up the 1st months claims cost and the Drs and Hospitals will pick up the other two months. Anyone who has been in the business knows that once one month goes by the likelihood of someone paying back premiums is very small. This problem will compound the already heavy administrative burden on insurance carriers and medical administrators. This problem will lead to the death spiral in rates. Those who need care will pay premiums and those who do not need care will opt out. This leaves a carrier with bad risk and rates will spiral out of control and will consume the whole market.